Low Interest Rates Plus Many Homes on Market Equals a Good Time to Buy
Interest rates well below 5 percent major reason this is a good time to buy a home, realtor says.
Jennifer Blanchard is a sales associate with Weichert Realtors in Basking Ridge.
Nick Lovegrove
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Photos
Low interest rates and high inventory (indicating the availability of homes for sale on the market) add up to making this a good time to buy a home.
There are a lot of reasons to buy a home: tax deductions, equity building, freedom to do what you please with your home versus having the restrictions of being in a rental, the stability of being in the same neighborhood and being part of a community. I'm sure we could think of lots more.
Despite all of those reasons, many are wondering if now is a good time to make the move to home ownership. I can assure you that now is a very good time to buy a home. I know—you are probably thinking, "Of course Jennifer is going to say that, she's a Realtor!" But in all honesty, I really do believe that today's high inventory levels of available housing combined with low interest rates make it a great time to take the plunge and become a homeowner.
Current interest rates are unbelievably low. According to my favorite mortgage representative, (Brian Wagenseller with Weichert Financial Services) a conventional 30-year fixed rate loan can be obtained for about 4.25 percent! This time last year the rate for that same loan would have been closer to 6 percent.
The monthly payment for a $250,000 loan at 6 percent is $1,500. Comparatively, that same loan at a rate of 4.5 percent is only $1,250.
That's a savings of $3,000 per year!
Inventory levels here in town are fluctuating between seven and eight months. (Inventory levels are a measure of how many sales there were in the past month compared with how many homes currently are available on the market)
Just like anything else, prices are a result of supply and demand. Inventory levels serve as an illustration of the forces of supply and demand, and it is key to look at these levels by price range. It doesn't matter much what the million dollar market is doing if you are looking for a condo!
Inventory levels for housing units under $300,000 are only around four months; things are a little more sluggish at the higher price points. The inventory for homes waiting to be sold is at about 11 months for housing priced in the range between $500,000 and $700,000. Now that's a lot to pick from!
As inventory levels rise, prices generally come down. So, if you can get a low rate on a low price, then you've gotten a great deal.
Here's what sold in Basking Ridge (Bernards Township) during the month of October:
|
|
Address |
List Price |
Sale Price |
|
445 King George Road |
$639,000 |
$624,000 |
|
|
45 Madisonville Road |
$444,000 |
$430,000 |
|
|
12 Frederick Court |
$799,000 |
$785,000 |
|
|
23 Roberts Circle |
$465,000 |
$445,000 |
|
|
2 Cooper Lane |
$1,074,000 |
$1,025,000 |
|
|
3 Saint Nickolas Way |
$849,900 |
$851,000 |
|
|
64 Countryside Drive |
$249,700 |
$237,500 |
|
|
31 Hilltop Road |
$599,000 |
$580,000 |
|
|
2 Sentinel Drive |
$799,000 |
$762,500 |
|
|
326 Lake Road |
$749,900 |
$742,500 |
|
|
101 Constitution Way |
$499,999 |
$475,000 |
|
|
79 Village Drive |
$365,000 |
$349,500 |
|
|
49 Queen Anne Drive |
$519,900 |
$500,000 |
|
|
34 Emily Road |
$1,550,000 |
$1,455,000 |
|
|
72 Aspen Drive |
$357,500 |
$350,000 |
|
|
203 Liberty Corner Road |
$624,000 |
$607,000 |
|
|
250 Alexandria Way |
$395,000 |
$418,800 |
|
|
15 Hilltop Road |
$485,000 |
$440,000 |
|
|
3001 Hemlock Place |
$280,000 |
$270,000 |
|
|
61 Smithfield Court |
$235,000 |
$228,000 |
|
|
35 Galloping Hill Road |
$764,900 |
$740,000 |
|
|
70 Baldwin Court |
$259,000 |
$245,000 |
|
|
34 Walnut Circle |
$929,000 |
$880,000 |
|
|
15 Baldwin Court |
$238,900 |
$233,000 |
|
|
203 Potomac Drive |
$228,000 |
$225,000 |
|
|
47 Dickinson Road |
$824,900 |
$824,900 |
|
|
11 Penwood Road |
$799,900 |
$760,000 |
|
|
16 Colonial Drive |
$799,000 |
$785,000 |
|
|
59 Canterbury Way |
$1,325,000 |
$1,290,000 |
|
|
340 Mountain Road |
$1,499,900 |
$1,382,500 |
|
|
88 Lyons Place |
$549,000 |
$520,000 |
|
|
141 Lake Road |
$519,900 |
$465,000 |
|
|
66 Baldwin Court |
$249,500 |
$249,500 |
Do you think interest rates can possibly go any lower (or do you think that rates are likely to start climbing again?)
Tell us in the comments.
nigeljo
3:07 am on Monday, November 8, 2010
Interest rates are simply incredible on mortgages right now. It's not uncommon to see 30 year rates down in low fours and 15 year rates in the threes. Week after week, the rates keep dropping If you are looking for rates in three then search online for "123 Mortgage Refinance"